Correlation Between Bank Rakyat and Frequency Therapeutics
Can any of the company-specific risk be diversified away by investing in both Bank Rakyat and Frequency Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bank Rakyat and Frequency Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Rakyat and Frequency Therapeutics, you can compare the effects of market volatilities on Bank Rakyat and Frequency Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bank Rakyat with a short position of Frequency Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Rakyat and Frequency Therapeutics.
Diversification Opportunities for Bank Rakyat and Frequency Therapeutics
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Frequency is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bank Rakyat and Frequency Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frequency Therapeutics and Bank Rakyat is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bank Rakyat are associated (or correlated) with Frequency Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frequency Therapeutics has no effect on the direction of Bank Rakyat i.e., Bank Rakyat and Frequency Therapeutics go up and down completely randomly.
Pair Corralation between Bank Rakyat and Frequency Therapeutics
If you would invest 52.00 in Frequency Therapeutics on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Frequency Therapeutics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Bank Rakyat vs. Frequency Therapeutics
Performance |
| Timeline |
| Bank Rakyat |
| Frequency Therapeutics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Rakyat and Frequency Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Rakyat and Frequency Therapeutics
The main advantage of trading using opposite Bank Rakyat and Frequency Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Rakyat position performs unexpectedly, Frequency Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Frequency Therapeutics will offset losses from the drop in Frequency Therapeutics' long position.| Bank Rakyat vs. Bank Mandiri Persero | Bank Rakyat vs. Eurobank Ergasias Services | Bank Rakyat vs. Nedbank Group | Bank Rakyat vs. Standard Bank Group |
| Frequency Therapeutics vs. Lineage Cell Therapeutics | Frequency Therapeutics vs. MAIA Biotechnology | Frequency Therapeutics vs. Armata Pharmaceuticals | Frequency Therapeutics vs. Portage Biotech |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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